MANAGEMENT DISCUSSION & ANALYSIS TOTAL EQUITY Total equity increased from US$4.4 billion as of 31 December 2021 to US$9.4 billion as of 30 June 2022. This is primarily due to the increase in share premium by US$4.3 billion from the issuance of new shares for ARA acquisition, consolidation of perpetual securities issued by ARA and net profits for the six months ended 30 June 2022 of US$419.7 million. The above increases are partially offset by currency translation losses on the Group’s operations in Japan, China and Korea during the period due to the strengthening of US dollars against the respective local currencies; as well as mark-to-market losses adjusted based on quoted market prices relating to the Group’s investments (classified as financial assets through other comprehensive income). CAPITAL MANAGEMENT ESR adopts a proactive and disciplined capital management approach, and regularly review its debt maturity profile and liquidity position. The Group maintains a well-capitalised balance sheet, and actively diversifies its funding sources through a combination of facilities with both local and international banks, and capital market issuances in optimising its costs of debt. The Group’s total borrowings as at 30 June 2022 were US$4.9 billion. The Group continues to take a disciplined approach to financial positioning with a well-capitalised balance sheet with US$2.0 billion of cash, and a low net gearing of 17.9% as of 30 June 2022.The Group continues to expand and proactively diversify its funding and capital structure. The Group monitors its debt maturity profile regularly. It also ensures sufficient cash reserves are maintained and disciplined in refinancing existing borrowings to meet the Group’s short-term obligations, ongoing developments, and investment opportunities. As at 30 June 2022, the Group’s weighted average debt maturity is approximately 4.8 years. As of 30 June 2022, the Group’s weighted average interest rate was 3.8%; and 15% of the Group's borrowings was on fixed rate while the remaining 85% was on floating rate basis. R E A C H I N G N E W H E I G H T S 16 ESR Yatomi Kisosaki Distribution Centre, Japan
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